Health and Healthcare Systems

How health economics is redefining climate-resilient healthcare

We need to build healthcare systems that nurture a healthier planet and people. Image:

Charlotte Ashton
Director of External Affairs, Office of Health Economics (OHE)
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This article is part of: Centre for Health and Healthcare
  • If the healthcare sector were a country it would be the fifth largest emitter of global greenhouse gas emissions.
  • Systemic change is therefore needed to tackle its environmental impact whilst managing the delivery of quality care.
  • Health economics can help advance sustainable practices and improve healthcare delivery.

Whilst it often attracts less attention than other threats, the intersection of healthcare and the environment is becoming increasingly apparent. The health and care sector are facing a monumental challenge: addressing its significant impact on the climate whilst delivering high-quality care under often immense pressures.

The sector's environmental impact is profound, if taken as a country, global healthcare would rank as the fifth largest global greenhouse gas emitter. This immense climate footprint arises from almost all aspects of delivery, including energy consumption, transportation, and medical product lifecycle emissions.

For instance, the UK’s NHS alone contributes approximately 4% of the country's total emissions, and NHS England has estimated that the manufacture, supply, and use of pharmaceuticals account for 25% of the NHS’ total carbon footprint.

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As we grapple with the pressing realities of climate change, alongside budget and capacity constraints of health systems, innovative and sustainable solutions are paramount – the urgency of which cannot be overstated. If we, as a global community, want to see immediate health benefits, tackling emissions from the very system that seeks to help us when we are sick must be at the top of the list.

Beyond health benefits including decreasing respiratory and cardiovascular diseases caused by air pollution, a wider rallying call can be made along economic, moral and future-focused lines. By taking pragmatic evidence-based measures now, the sector can make significant contributions to climate mitigation, redirecting savings from sustainability measures into patient care, and safeguarding future generation’s ability to stay healthy in a warming world.

Key steps include enhancing energy efficiency, reducing waste, and adopting renewable energy sources. Systemic changes like improving disease prevention and chronic disease management can also reduce the sector's environmental impact. Enter health economics – a powerful, but often underutilised, discipline poised to change how we approach this critical issue.

The role of health economics

Health economics has played a crucial role in advancing sustainable healthcare practices worldwide by providing frameworks for optimising resource allocation, evaluating cost-effectiveness, and promoting equitable access to healthcare services. Through rigorous analysis of healthcare systems, health economics has identified inefficiencies and disparities, leading to interventions aimed at improving healthcare delivery while minimising waste.

Moreover, health economics has shed light on the social determinants of health and disparities in access to care, prompting initiatives to address underlying socioeconomic factors affecting health outcomes.

By integrating economic principles with public health objectives, health economics has been instrumental in shaping policies and interventions that promote long-term sustainability in healthcare delivery, ultimately contributing to improved health outcomes for populations globally.

The discipline's role is also critical in shaping how the healthcare market rewards investment in decarbonization. The value assessment structure within the UK for example, managed by NICE, helps the NHS to allocate its resources to maximise health.

As improving health has a significant impact on the environment, the environmental health impact of healthcare should no longer be left out of decision-making. Without better structures for policy making, informed by evidence, the market will continue to incentivize innovation in an environmental vacuum and will fail to support human and planetary health.

Launch of healthcare initiative

At the forefront of this is the Office of Health Economics (OHE), with the launch of the Change Initiative. This global cross-sector non-profit collaboration represents a bold vision: to leverage the insights of economics in developing evidence-based solutions to mitigate the environmental footprint of healthcare.

But what does this entail?

Firstly, we are examining the impact of investing in prevention: by prioritising preventative measures and population health initiatives, we can reduce the need for resource-intensive treatments and interventions, thereby lessening our environmental footprint and improving population health.

Alongside this we are exploring how to incentivise green healthcare practices: from financial incentives for implementing sustainable infrastructure to performance-based metrics tied to environmental outcomes, aligning incentives has the potential to foster a culture of green innovation and accountability. Policy also plays a key role within the package of incentives, with regulatory frameworks and carbon pricing mechanisms grounded in economic theory having the power to drive systemic change at scale.


What is the World Economic Forum doing to improve healthcare systems?

Further research ambitions include mapping the global healthcare landscape to identify environmental pressure points, identifying and learning from existing best practices, exploring potential trade-offs between health, finance, and environmental outcomes, and developing enablers of green healthcare (e.g. financial levers, digital health and AI).

The launch of the Change Initiative marks a pivotal moment in the search for climate-resilient healthcare. Through collaboration, innovation, and a steadfast commitment to sustainability, this global initiative is generating evidence, research, and solutions that will shape the future of healthcare and environmental stewardship.

The not-for-profit research fund is addressing the most critical health challenges of our time, from combating climate change to advancing prevention efforts, the Initiative is breaking down the barriers which exist between stakeholders. With pharmaceutical companies, civil society organizations, academia and national health system leaders involved, the Initiative is leveraging the unique strengths of each stakeholder to tackle health challenges more effectively and holistically.

As we confront the challenges posed by climate change, one thing is clear: the time for action is now. Together, we can build a healthcare system that not only heals the sick but also nurtures a healthier planet for generations to come.

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Health and Healthcare SystemsClimate Action
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